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The Australian Energy Market Commission (AEMC) is seeking public feedback on a rule change request to the National Electricity Rules (NER), submitted by State and Federal Energy Ministers. 

The rule change request was submitted by Federal Minister for Climate Change, Chris Bowen, Victorian Minister for Energy and Resources, Lily D’Ambrosio, and Tasmanian Minister for Energy and Renewables, Nick Duigan.

The AEMC is examining the proposal, which is intended to introduce greater flexibility to the framework and address potential barriers to delivering interconnector projects.

The proposal aims to enable agreements made by governments on interconnector cost allocation to be implemented and recovered in line with such agreements. 

Interconnectors are also known as cross border transmission projects.    

AEMC Chair, Anna Collyer, said additional cross border transmission links are vital to integrating and connecting new sources of renewable generation and storage. 

“Improving the connectivity between states and territories who participate in the National Energy Market is an important component of Australia transitioning to net zero,” Ms Collyer said. 

“This rule change request explores providing more flexibility to ensure these critical projects can proceed in a timely manner for the benefit of consumers.”

The existing NER set out requirements for how interconnector project costs are recovered from consumers over time. These rules have previously underpinned the successful development of interconnector projects.

The proposal suggests barriers may exist which could be addressed through inter-governmental cost allocation agreements under the rules.

Proposed agreements would be subject to certain criteria and timing requirements, which will be consulted on through the rule change process.  

“The energy transition requires a strategic, modern transmission network. This request by ministers looks at whether there should be a pathway for governments to collaborate effectively on cost sharing for cross border projects that deliver long term benefits to consumers and which would otherwise be at risk of delay or not proceeding,” Ms Collyer said. 

The rule change request does not propose changes to the standard cost allocation framework if an inter-governmental agreement is not entered into, nor to the regulatory approval process. 

The AEMC is seeking stakeholder feedback on the rule change request, including the design and implementation considerations.

Written submissions on the consultation paper can be made until Thursday 11 April 2024.

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